The Biden-Trudeau meeting & the road ahead for the US-Canada relationship

Today President Joe Biden held his first bilateral with Canada's prime minister, Justin Trudeau. To discuss the road ahead for the US-Canada relationship, and what it might foreshadow for the many bilaterals we're going to see in the coming weeks as Biden rolls out his foreign policy agenda, Jon Lieber, head of Eurasia Group's coverage of US political and policy developments, is joined by Eurasia Group Vice Chairman Gerald Butts, who was Trudeau's Principal Secretary until 2019, in a special edition of US Politics In (a little over) 60 Seconds.

Jon Lieber:

Could you give us a little color on the significance of this meeting for both Biden and Trudeau, and maybe take us behind the scenes of kind of how you prep for this, and what the first meeting with the president means?

Gerald Butts:

Well, it's obviously a more significant meeting from the Canadian perspective than it is from the United States perspective, which is not to diminish the value of the Canadian relationship to the United States. I think I'm constitutionally obliged to tell every American I know that it is your largest trading, second largest trading relationship overall, and Canada remains the largest market for US exports. So, having got that constitutional responsibility out of the way, it's a much bigger deal for the Canadians than it is for the Americans, obviously. By far the most important international relationship that any Canadian prime minister has, and one on which he or she is judged politically, is the relationship with the president of the United States, and how they're able to constructively manage that relationship, regardless of their political differences.

Jon Lieber:

It's pretty normal for the first meeting with the Canadian prime minister, right? Like it would kind of be a snub if the US president went in a different direction?

Yeah, there'll be a huge sigh of relief in the opinion leading circles here in Canada that the new president has chosen to have his first bilateral with Canada. Obviously, Joe Biden, as a Midwestern Democrat in origin, if a senator from Delaware, is very well skilled in Canada. He's called himself a friend of Canada, had very successful visits here as vice president with Prime Minister Trudeau. So, as we said to many people around the world, Jon, Joe Biden, looks, talks, sounds, feels a lot like more people outside of the United States want their US president to look.

Jon Lieber:

Sure. And I guess in Canada, much like a lot of other places around the globe, it's a bit of a sigh of relief that they're no longer dealing with President Trump, which is probably the most important thing about President Biden, at least for the very short term.

Gerald Butts:

Yeah, not being Donald Trump is a good thing for the United States's bilateral relationship with China. It's impossible to overstate how unpopular Donald Trump was in Canada. It would make him look popular in the bluest of blue states in the United States. All that said, there remain very difficult, nettlesome issues for Canada and the United States. While we've got the big piece, macro piece of the puzzle in place with bipartisan support for the new NAFTA agreement, there are still some significant issues. The new administration's rejection of the Keystone Pipeline on day one was of course a major irritant for the government here. But the bigger picture challenge is how does Canada reorient itself toward the new president's most significant change in policy direction, and that's of course on climate change and energy.

Jon Lieber:

Yeah, I was going to ask about that next. You know, you look at the relationship with the Europeans, for example, and obviously Biden's got a much more multilateral approach. And I think initially there was some thought that that would lead to a lot of reproachment with the Europeans, but it's become pretty clear that there's some deep divisions between the Americans and the Europeans over issues like Russia, China. And that's the case with Canada, as well. You've got Buy America, procurement issues. You've got the existing 232 tariffs. There's the perennial issues of lumber and dairy that I think have yet to be resolved between the US and Canada. So, which one of these things do you think is going to be a big irritant, and what kind of progress can be made that hasn't been made under other presidents?

Gerald Butts:

Well, without question... And it's funny you mentioned the traditional irritants. Those dairy policy and soft wood lumber have the status of an annuity within the bilateral trade relationship between Canada and the United States. No matter who's in the White House or who's in the prime minister's office here, they're always a challenge.

But by far the biggest short-term issue for Canada... And we probably got a little bit of clarity about this today. Both sides will reap positives in it... is the Buy America policy, no question, that every prime minster, going back to the prime minister's father when he was prime minister and President Nixon was president, has managed to come to some sort of mutually agreeable arrangement, where Canada is for all intents and purposes considered part of the United States for procurement and trade purposes. And the Biden team's domestic political objectives are a little sharper than they have been in the past on this front, given all of the big economic trends around reshoring and the context of the campaign, of course. So, they've got to be very careful on this. I'm one who believes that reasonable people usually arrive at mutually agreeable outcomes when there's one to be had, and they probably will in this case, as well.

Jon Lieber:

Yeah, the politics of this have shifted as well, because President Trump kind of shocked the system in terms of making protectionism of the US cool again for both sides, for Democrats and Republicans. And Biden kind of …

Gerald Butts:

I didn't see that on too many hats.

Jon Lieber:

Yeah, exactly. Everyone sees that. Yeah, it's a famous slogan. Yeah. And Biden's going to have to live with that legacy now, and it does affect... I mean, obviously it would affect Canada.

Gerald Butts:

Yeah, without a doubt. And I think relatedly, on the climate front, the big challenge for Canada here of course is that the supply chain... And it's been the big benefit for Canada over time economically, that our supply chains are just so integrated. Right? That the average automobile created by Detroit OEM crosses the border several times before it becomes an auto. It grows from parts into an automobile is the most obvious example. We have a very big, deep energy relationship.

And I think personally, as someone who's kind of been through these wars from the inside out, the biggest challenge that Canada is going to have in the Biden era... Say what you want about Donald Trump. At the end of the day, there was no way for him to renegotiate NAFTA without Canada agreeing to the final outcome. I think that that was a key piece of leverage that Canada maintained, and used pretty skillfully throughout the conversation, throughout the negotiations. But when it comes to climate change, Joe Biden doesn't really need Canada to implement his domestic climate policy.

Personally, as someone who spends a lot of time on the issue, I would argue that his objectives, in particular the 2035 decarbonization objective that was the main headline of the climate platform during the campaign, is a lot easier if you're doing it in concert with Canada, where there already is a lot of low and zero carbon electricity available, some of which of course already powers major American cities like New York. That's another constitutional obligation as the Canadian, Jon. But we're Canadians. We're cooperative. We like to think that we can help the United States achieve its objectives, especially when they're mutually held north of the border.

Jon Lieber:

And before I let you go, Gerry, there are two kind of new issues that have come up between the US and Canada. One is vaccines, where vaccine distribution... You know. The US has procured this large stockpile and isn't sharing it just yet. And Canada I believe is a little bit behind the US in terms of rates of vaccination, and could use some help here, and that's unlikely to be coming. And the second is China, where Canada for a while now has been caught in between the US and China, and kind of has to navigate a really delicate role. I know you work on that issue, so I'd love to hear your thoughts on those two issues.

Yeah. Well, the second one is obviously the longer-term issue that, knock on wood, will certainly be with us over the longer term. Look, you and I talk to people around the world about this issue all the time. Canadians, one of our endearing qualities, we tend to think we're unique in the world on a lot of the things. And there are a lot of Canadians who think we're uniquely caught between the US and China as they reexamine their strategic security and economic relationship. I always invite those people to call their closest Japanese friend or South Korean friend, and ask them the same question... Or Australian friend, for that matter, and ask them how they feel about it.

Look. At the end of the day, this is a big structural realignment, both from a security and an economic perspective. Canada's going to have to find its way through that transition, like every other country is in the world. There are probably not too many that I would trade places with.

And on the vaccines, obviously the United States has domestic manufacturing capacity, as does the U.K., and it's given it kind of a head start. There have definitely been some problems with the vaccine rollout here. In particular, like most federal estates, there have been, charitably call them "disputes" between orders of government about how the pandemic overall should be managed, the degree of the lockdown. We have, on the far east coast here where I grew up in Atlantic Canada, it's kind of the New Zealand North America, where the pandemic's been managed very, very well. Very few people have died, and very, very few people have caught the virus. And we have other provinces, like back in Ontario where I live, where the situation has looked a lot more like it has in sort of median of the United States. So, it's a challenge to federalist systems everywhere.

All that said, it's a big couple of months coming up for both the federal government here and the provincial government. The vaccine supplies are starting to flood into the country, and all orders of the government are going to be judged by how efficiently they deliver them and get those, as our British friends would say, jabs in arms.

Jon Lieber:

Great. Well Gerry, thanks for joining us. I hope next time we do this; we can do it in person once they've opened the border again. But good to talk to you.